Insights Are the Meat; Data Is the Relish
The problem with so many BI tools, says Chasney, is that they're no different from the standard corporate reporting tools that have been around for years, which churn out old data like curdled butter and don't provide information that executives can chew on. If companies really want to get value from BI, he says, they need a system that provides them with insights, not just mountains of data. "There's nothing worse, in my opinion, than a business intelligence system that reports changes on a weekly basis," he says, because those systems don't provide any context as to what factors are influencing those changes. Without that context, you don't know whether the data is good or bad; it's just useless.

When charting a course for BI, Chasney advises companies to first analyze the way they make decisions and to consider the information that executives need to facilitate more confident and more rapid decision making, as well as how they'd like that information presented to them (for example, as a report, a chart, online, hard copy). Discussions of decision making will drive what information companies need to collect, analyze and publish in their BI systems.

When Chasney started building CPR in 2000, he asked the company's CEO and the chief operating officers of CKE's three restaurant chains - Hardee's, Carl's Jr and La Salsa Fresh Mexican Grill - what information is most important in their efforts to run the company. The CEO wanted to know what caused changes in sales. The COOs wanted something that would indicate business opportunities they could pursue as well as clear indicators as to which restaurants were underperforming. The discussions taught Chasney that BI systems need to focus on a company's most important performance indicators - including sales and cost of sales; exceptions, such as those areas of the business that are outperforming or underperforming other segments; and historical and forward-looking business trends - if they're to provide the company with any value.

Good BI systems also need to give context. It's not enough that they report sales were X yesterday and Y a year ago that same day, says Chasney. They need to explain what factors influencing the business caused sales to be X one day and Y on the same date the previous year. CPR uses econometric models, which the company reviews and refines each month, to provide context and to explain performance. The econometric models take into consideration 44 factors, including the weather, holidays, coupon activity, discounting, free giveaways and new products. If the CEO wants to find out why sales were down on any given day at Hardee's, all he has to do is click the "explain" button on his computer screen, and the model performs its magic. The CEO will see, for example, that 5 percent of the 8 percent decrease was due to torrential rain in the US Northeast and 2 percent was due to free giveaways.